Yes, that’s right. You don’t have to be a First Time Home Buyer.
There is a misconception out there that you can only buy a property with a 5% down payment if you’re a first time home buyer. Well, I’m here to tell you that simply is not true. You might have the funds available right now to buy that next property and you didn’t even know it!
Here are the things you can accomplish with as little as a 5% down payment (e.g., a $500,000 property would require a $25,000 down payment):
- You can buy a cottage. You could enjoy your own family time there and if you choose, use a service like Airbnb and rent out the cottage when you’re not using it to offset some or all of your carrying costs.
- Turn your current home into a rental property and buy another principal residence. If you don’t have the 5% down payment, you can look at a refinance of your current home to access the funds. This would be the quickest way to get another property into your growing portfolio.
- Buy a home for a family member. If you have an immediate family member who needs your financial assistance, they can move into the property as long as they are not deemed rental tenants.
- Buy a home with a rental suite. Typically, you require a 20% down payment to buy a rental property. However if you plan on living on the main level and there is a legal basement suite, you can buy this property with just 5% down and earn rental income from day one.
- Buy that next home. It doesn’t matter if you’ve owned 1 or 4+ homes in the past. You can always take advantage of the 5% down payment option.
Keep in mind, you’ll have to qualify for all of these situations. With that being said, don’t fret! That’s what I’m here for, to let you know all of the options available based on your unique details.
If you’d like to chat in more detail, just let me know. I’m here to help!
**For properties over $500,000, the minimum down payment increases slightly. You need to put down 5% of the first $500k and then 10% of the balance over $500k. For example, a $650,000 purchase means 5% of $500k = $25,000 + 10% of $150k = $15,000. Your absolute minimum down payment in this example required is $25,000 + $15,000 = $40,000.